2 6 13 - advancedpack.com.myannual report 2019 laporan tahunan notice of annual general meeting...

1annual report 2019 laporan tahunan

Financial Statements46 Directors’ Report 50 Statement by Directors 50 Statutory Declaration51 Independent Auditors’ Report to the Members55 Statement of Profit or Loss and Other Comprehensive Income56 Statement of Financial Position57 Statement of Changes in Equity58 Statement of Cash Flows61 Notes to the Financial Statements103 List of Properties104 Analysis of Shareholdings Form of Proxy

2 Notice of Annual General Meeting6 Statement Accompanying the Notice of Annual General Meeting 13 Corporate Information14 Directors’ Profile 18 Profile of Key Senior Management 20 Sustainability Statement 22 Corporate Governance Overview Statement32 Other Information 33 Statement on Risk Management and Internal Control 37 Directors’ Responsibility Statement38 Audit Committee Report41 Chairman’s Statement43 Management Discussion and Analysis45 Five Years Financial Highlights and Financial Indicators

2Advanced Packaging Technology (M) Bhd Registration No.:198201003236 (82982-K)

NOTICE IS HEREBY GIVEN that the Thirty-Eighth Annual General Meeting (“AGM”) of Advanced Packaging Technology (M) Bhd (“the Company”) will be convened and held at Bangi Resort Hotel, Off Persiaran Bandar, 43650 Bandar Baru Bangi, Selangor Darul Ehsan on Wednesday, 26 August 2020 at 12.30 p.m to transact the following items of business :-

AGENDA

As Ordinary Business

1. To receive the Statutory Financial Statements for the year ended 31 December 2019 together with the Directors’ and Auditors’ Reports thereon.

2. To approve the payment of Directors’ Fees of RM235,000 per annum for the year

ended 31 December 2019. 3. To approve the payments of Directors’ Benefit (excluding Directors’ Fees) up to an

amount of RM100,000 from 1 June 2020 until the next AGM of the Company. 4. To re-elect the following Directors who retire in accordance with Article 96 of the

Company’s Constitution:-

a) Mr Mah Siew Seng; and

b) Mr Ng Choo Tim.

5. To re-elect the following Directors who retire in accordance with Article 102 of the Company’s Constitution:

(a) Mr Pang Chong Yong; and

(b) Mr Andrew Ling Yew Chung.

6. To re-appoint Messrs PKF as Auditors of the Company and to authorise the Directors to fix their remuneration.

As Special Business

To consider and if thought fit, to pass the following resolutions:-

Ordinary Resolutions

7. Proposed Retention of Independent Directors in accordance with the Malaysian Code on Corporate Governance 2017:-

(a) “THAT authority be and is hereby given to Dato’ Haji Ghazali B. Mat Ariff who

has served as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years to continue to act as an Independent Non-Executive Director of the Company.”

Notice of Annual General Meeting

Ordinary Resolution 1









(b) “THAT subject to the passing of Ordinary Resolution 3, authority be and is hereby given to Mr Mah Siew Seng who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years to continue to act as an Independent Non-Executive Director of the Company.”

(c) “THAT subject to the passing of Ordinary Resolution 4, authority be and is hereby given to Mr Ng Choo Tim who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years to continue to act as an Independent Non-Executive Director of the Company.”

(d) “THAT authority be and is hereby given to Datuk Ismail bin Haji Ahmad who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company.”

8. Proposed renewal of Shareholders’ Mandate for the Company to buy-back its own shares (“Proposed Shareholders’ Mandate”)

“THAT subject to the Companies Act, 2016 (“the Act”), the Company Constitution,

Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and all other prevailing laws, rules, regulations and orders issued and/or amended from time to time by the relevant regulatory authorities, the Company be and is hereby authorised to renew the approval granted by the shareholders of the Company at the Thirty-Seventh Annual General Meeting of the Company held on 30 May 2019, authorising the directors of the Company to purchase and/or hold up to 10% of the total number of issued share capital of the Company (“Proposed Share Buy-Back”) as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors of the Company may deem fit and expedient in the interest of the Company and an amount not exceeding the retained profits of the Company, be allocated by the Company for the Proposed Share Buy Back. The audited retained profits of the Company as at 31 December 2019 amounted to RM 9,803,243.

AND THAT upon completion of the purchase by the Company of its own shares, the Directors be and are hereby authorised to cancel such shares or retain such shares as the treasury shares or a combination of both. The Directors are further authorised to resell the treasury shares on Bursa Securities or distribute the treasury shares as dividends to the shareholders of the Company or subsequently cancel the treasury shares or any combination of the three (3) and in any other manner as prescribed by the Act, rules and regulations and orders made pursuant to the Act and requirements of Bursa Securities and any other relevant authority for the time being in force.

AND FURTHER THAT the Directors be and are hereby authorised to carry out the Proposed Share Buy-Back immediately upon the passing of this resolution until:-

(a) the conclusion of the next AGM of the Company, unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions;

(b) the expiration of the period within which the next AGM is required by law to be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting,

Notice of Annual General Meeting (cont’d)







whichever occurs first but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and to take all steps as are necessary and/or to do all such acts and things as the Directors may deem fit and expedient in the interest of the Company to give full effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, amendments and/or variations as may be imposed by the relevant authorities.”

9. To transact any other ordinary business of which due notice shall have been given.

BY ORDER OF THE BOARD

LEONG SHIAK WAN (MAICSA 7012855) (SSM PC No. 202008002757)ZURIATI BINTI YAACOB (LS0009971) (SSM PC No. 202008003191)Joint Company Secretaries

Petaling Jaya30 June 2020

NOTES:

1. Proxy

1.1 A member of the Company entitled to attend and vote at this meeting may appoint a maximum of two proxies to vote in his stead. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. A proxy may but need not be a member of the Company. If the proxy is not a member of the Company, he shall be any person and there shall be no restriction as to the qualification of the proxy.

1.2 Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy (but not more than two) in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

1.3 Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

1.4 An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

1.5 The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing, and in the case of a corporation, shall be either given under its common seal or under the hand of an officer or attorney duly authorised.

1.6 The instrument appointing a proxy must be deposited at Ground Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan not less than forty-eighth (48) hours before the time appointed for holding the meeting or any adjournment thereof.

1.7 Only members whose names appear in the Record of Depositors on 18 August 2020 shall be entitled to attend, speak and vote at the AGM.

1.8 Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the Resolutions set out in the Notice of the Thirty-Eighth AGM will be put to vote by poll.

2. Audited Financial Statements for financial year ended 31 December 2019

2.1 The audited financial statements are laid in accordance with Section 340(1)(a) of the Companies Act, 2016 for discussion only under Agenda 1. They do not require shareholders’ approval and hence, it will not be put forward for voting.

3. Ordinary Resolutions 3 and 4: Re-election of Directors who retire by rotation in accordance with Article 96 of the Company’s Constitution.

3.1 Article 96 of the Company’s Constitution provides that one third (1/3) of the Directors of the Company for the time being shall retire by rotation at the Annual General Meeting of the Company. Pursuant to Paragraph 7.26 (2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all Directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Mr Mah Siew Seng and Mr Ng Choo Tim are standing for re-election as Directors of the Company and being eligible have offered themselves for re-election.

4. Ordinary Resolutions 5 and 6: Re-election of Directors who retire in accordance with Article 102 of the Company’s Constitution.

4.1 Article 102 of the Company’s Constitution provides that any new directors appointed after last Annual General Meeting held on 30 May 2019 shall hold office only until next Annual General Meeting but shall be eligible for re-election. Mr Pang Chong Yong and Mr Andrew Ling Yew Chung who were appointed on 16 June 2020 and 18 June 2020 respectively, being eligible have offered themselves for re-election.

5. Ordinary Resolution 8 to 11: Retention of Independent Non-Executive Directors

5.1 The Ordinary Resolutions 8 to 11, if passed, will allow the named directors to continue to act as Independent Non-Executive Directors of the Company.



5.2 The Nomination Committee had assessed the independence of Dato’ Haji Ghazali B. Mat Ariff , Mr Mah Siew Seng, and Mr Ng Choo Tim who each has served on the Board as Independent Non-Executive Directors of the Company for a cumulative term of more than twelve (12) years and Datuk Ismail Bin Haji Ahmad who has served on the Board as Independent Non-Executive Directors of the Company for a cumulative term of more than nine (9) years; the Board has recommended that the approval of the shareholders be sought to re-appoint Dato’ Haji Ghazali B. Mat Ariff, Mr Mah Siew Seng, Mr Ng Choo Tim and Datuk Ismail Bin Haji Ahmad as Independent Non-Executive Directors as all of them possess the following aptitudes necessary in discharging their roles and functions as Independent Non-Executive Directors of the Company:-

(a) Have vast experience in the industry the Company is involved in and as such could provide the Board with a diverse set of experience, expertise and independent judgement;

(b) Consistently challenge management in an effective and constructive manner;

(c) Have good and thorough understanding of the main drivers of the business in a detailed manner;

(d) Actively participate in board deliberations and decision making in an objective manner; and

(e) Exercise due care in all undertakings of the Company and carry out their fiduciary duties in the interest of the Company and minority shareholders.

6. Ordinary Resolution 12: Proposed Shareholders Mandate

6.1 The Ordinary Resolution 12, if approved, will empower the Directors of the Company to purchase and/or hold up to a maximum of ten percent (10%) of the total number of issued share capital of the Company at any point of time, by utilising the funds allocated which shall not exceed the total retained profits of the Company. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of period within which the next Annual General Meeting is required by law to be held, whichever is earlier. Further information on this proposed Ordinary Resolution is set out in the Statement Accompanying Notice of AGM enclosed in the Annual Report 2019 of the Company on pages 6 to12.

7. Abstention from Voting

7.1 All the Non-Executive Director who are shareholders of the Company will abstain from voting on Ordinary Resolution 1 and Ordinary Resolution 2 concerning Directors’ fees and Directors’ benefit (excluding Directors’ fees) respectively at the Thirty-Eighth AGM. Any Director referred to in Ordinary Resolutions 3, 4, 5, 6, 8, 9, 10 and 11 who is a shareholder of the Company will abstain from voting on the resolution in respect of his re-election or retention as a Director at the Thirty-Eighth AGM.


Statement Accompanying Notice of Annual General Meeting

PART I : GENERAL INFORMATION

1) NAMES OF DIRECTORS STANDING FOR RE-ELECTION

The names of the Directors standing for re-election at the forthcoming Thirty-Eighth Annual General Meeting are as follows:-

Re-election under Article 96 of the Company’s Constitution

a) Mr Mah Siew Sengb) Mr Ng Choo Tim

Re-election under Article 102 of the Company’s Constitution

a) Mr Pang Chong Yongb) Mr Andrew Ling Yew Chung

2) DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETINGS

The number of Board of Directors’ Meetings held and attendance by directors during the financial year ended 31 December 2019 are as follows:-

NAME OF DIRECTORS NUMBER OF MEETINGS NUMBER OF MEETINGS HELD ATTENDED

Datuk Ismail bin Haji Ahmad 4 4

Yeo Tek Ling 4 4

Dato’ Haji Ghazali B. Mat Ariff 4 4

Ng Choo Tim 4 4

Mah Siew Seng 4 4

Law Mong Yong 4 4

Tjin Kiat @ Tan Cheng Keat 4 4(Resigned on 31 December, 2019)

Chee Chin Hung 3 3(Resigned on 25 October, 2019)

3) PLACE, DATE AND HOUR OF THE THIRTY-EIGHTH ANNUAL GENERAL MEETING

The Thirty-Eighth Annual General Meeting of the Company will be held at Bangi Resort Hotel, Off Persiaran Bandar, 43650 Bandar Baru Bangi, Selangor Darul Ehsan on Wednesday, 26 August 2020 at 12.30 p.m.

4) DETAILS OF DIRECTORS STANDING FOR RE-ELECTION

The details of the directors standing for re-election at the forthcoming Thirty-Eighth Annual General Meeting are set out on pages 14 to 17 of the Annual Report.


Statement Accompanying Notice of Annual General Meeting (cont’d)

PART II : SHARE BUY-BACK STATEMENT(Pursuant to paragraph 12.06 (1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

1.0 IMPORTANCE

If you are in any doubt as to the course of action to be taken, you should consult your Stockbroker, Bank Manager, Solicitor, Accountant or other Professional Adviser immediately.

Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused this Share Buy-Back Statement

(“Statement”) prior to its issuance as it is an exempt Statement. Bursa Securities takes no responsibility for the contents of this Statement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Statement.

2.0 DETAILS OF THE PROPOSED SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK

2.1 Introduction

At the Thirty-Seventh Annual General Meeting (“AGM”) held on 30 May 2019, Advanced Packaging Technology (M) Bhd (“APT or the Company”) obtained shareholders’ approval for the purchase of up to a maximum of ten percent (10%) of the issued and paid up share capital of the Company on Bursa Securities.

This authority conferred by the shareholders will expire at the conclusion of the forthcoming Thirty-Eighth AGM of the Company.

On 13 March 2020, the Board of Directors of APT announced to Bursa Securities that APT proposed to seek shareholders’ approval for the renewal of the Shareholders’ Mandate at the forthcoming Thirty-Eighth AGM to allow the Directors to exercise the power of the Company to purchase its own shares up to a maximum of ten percent (10%) of the total number of issued shares of APT at any point in time through Bursa Securities (“Proposed Shareholders’ Mandate for Share Buy-Back” or “Proposed Share Buy-Back”).

The purpose of this statement is to provide you with information on the Proposed Share Buy-Back, and to seek approval for the ordinary resolution to be tabled under special businesses at the forthcoming Thirty-Eighth AGM of the Company.

The Proposed Shareholders’ Mandate for Share Buy-Back will take effect immediately after passing of the ordinary resolution at the forthcoming Thirty-Eighth AGM and will continue in force until:-

(a) the conclusion of the next AGM of the Company following the Thirty-Eighth AGM at which the

ordinary resolution for the Proposed Share Buy-Back is passed, at which time it shall lapse, unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; or

(b) the expiration of the period within which the next AGM after that date is required by the law to be held; or

(c) the authority is revoked or varied by a resolution passed by the shareholders of the Company in

a general meeting,

whichever occurs first. The Shareholders’ Mandate, if obtained, would give authority to the Directors to exercise the power of

the Company to purchase its own Shares in circumstances which the Directors consider would be in the interest of the Company.



2.2 The maximum number or percentage of share to be acquired

The Board proposes to seek a mandate from the shareholders of APT to purchase and/or hold in aggregate up to ten percent (10%) of the total number of issued shares of the Company at any point in time through Bursa Securities.

2.3 Funding

The Board proposes to allocate a maximum amount not exceeding the audited retained profits of APT for the purchase of its own Shares. As at 31 December 2019, the audited retained profits of the Company amounted to RM 9,803,243.

The purchase of the Company’s own Shares will be sourced wholly from internally generated funds and/or borrowings or a combination of both, of the Company. In the event the Company decides to utilise bank borrowings to finance the Proposed Share Buy-Back, the Board will ensure that the Company has sufficient financial capability to repay the bank borrowings and that the bank borrowings will not have a material impact on the cash flow of the Company.

3. SHAREHOLDINGS OF DIRECTORS AND MAJOR/SUBSTANTIAL SHAREHOLDERS AND PERSON CONNECTED WITH THE DIRECTORS AND MAJOR SHAREHOLDERS

As at 1 June 2020, being the latest practicable date prior to printing of this Statement (“LPD”) and assuming that APT purchases shares of up to ten percent (10%) of its total number of issued shares and that the Purchased Shares are from public shareholders, the effect of the Proposed Share Buy-Back on the shareholdings of the Directors, Major/Substantial Shareholders and persons connected with the Directors and/or Major Shareholders are as follows:-

Notes:# negligible (i) Based on the existing number of issued shares of 20,504,250 (excluding 1,392,016 Treasury Shares held by the Company as at LPD(ii) Based on the number of issued shares of 18,453,825 shares assuming the Company purchases the maximum 2,050,425 shares, representing ten per

centum (10%) of its total number of issued shares of 20,504,250

No. of APT Shares held

As at LPD

Directors Direct % (i) Indirect % Direct % (ii) Indirect %

Yeo Tek Ling 12,169 0.06 - - 12,169 0.07 - -

Ng Choo Tim 648,297 3.39 - - 648,297 3.51 - -

Law Mong Yong 459 0.00# - - 459 0.00# - -

Dato’ Haji Ghazali B. Mat Ariff - - - - - - - -

Mah Siew Seng - - - - - - - -

Datuk Ismail Bin Haji Ahmad - - - - - - - -

Pang Chong Yong 1,593,493 8.34 - - 1,593,493 8.64 - -

Andrew Ling Yew Chung - - - - - - - -

Major /Substantial Shareholders

Brilliant Smart International 1,616,262 8.46 - - 1,616,262 8.76 - -Limited

Pang Chong Yong 1,593,493 8.34 - - 1,593,493 8.64 - -

Peter Ling Ee Kong 1,130,300 5.91 - - 1,130,300 6.13 - -

After Proposed Shareholders’ Mandate for Share Buy-Back assuming 10% of the

ordinary share capital are boughtback and cancelled(ii)


4. POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK

4.1 Potential Advantages

The Proposed Share Buy-Back, if exercised, is expected to potentially benefit the Company and its shareholders as follows:

(a) The Company would expect to enhance the Earning Per Share (“EPS”) of the Company (in the case where the Directors resolve to cancel the Purchased Shares so purchased and/or retain the Purchased Shares as Treasury Shares and the Treasury Shares are not subsequently resold), and thereby long term and genuine investors are expected to enjoy a corresponding increase in the value of their investments in the Company;

(b) If the Purchased Shares are kept as Treasury Shares, it will give the Directors an option to sell the Purchased Shares at a higher price and therefore make a gain for the Company. In addition, the Company may utilise the proceeds for any feasible investment opportunity arising in the future, or as working capital. Alternatively, the Purchased Shares can be distributed as share dividends to shareholders; and

(c) The Company may be able to stabilise the supply and demand of its Shares in the open market and thereby supporting its fundamental values.

4.2 Potential Disadvantages

The Proposed Share Buy-Back is expected to have cash flow implications whereby the working capital will be reduced. However, it will not have a material impact on the cash flow of the Company.

5. FINANCIAL EFFECTS

Based on the assumption that the Proposed Share Buy-Back is carried out in full, the effect of the Proposed Share Buy-Back on the share capital, dividend, Net Assets (“NA”), EPS and working capital of APT are as set out below:

(a) Share Capital

Based on the issued and paid-up share capital of APT as at LPD of RM20,504,250 comprising 20,504,250 APT Shares, a maximum of 2,050,425 APT Shares may be purchased and cancelled pursuant to the Proposed Share Buy-Back.

The Proposed Share Buy-Back will not have any effect on the issued and paid-up share capital of the Company if all the Shares purchased are retained as Treasury Shares.

The effect of the Proposed Share Buy-Back on the issued and paid-up share capital of the Company if all the Shares Purchased are cancelled is outlined below:




No. of APT ordinary Amount (RM) share

Existing issued and paid-up share 20,504,250 20,504,250.00 capital as at LPD

Purchased and held as Treasury Shares 1,392,016 1,392,016.00 as at LPD If maximum number of shares are 658,409 658,409.00 purchased pursuant to the Proposed Share Buy-Back

Issued and paid-up capital, if 2,050,425 18,453,825 18,453,825.00 Treasury Shares are cancelled

(b) Dividends

Assuming the Proposed Share Buy-Back is implemented in full and the dividend quantum is maintained at historical levels, the Proposed Share Buy-Back will have the effect of increasing the dividend rate of APT as a result of the reduction in the issued and paid–up share capital of APT as described under Section 5 (a) above.

(c) NA Per Share and EPS

The NA per share of the Company may be increased or decreased, depending on the purchase prices of the Shares to be bought back by the Company. Should the purchase prices exceed the existing NA per share, the NA of the remaining Shares should decrease accordingly. And conversely, should the purchase price be lower than the existing NA per share unit, the resultant NA per share should increase accordingly. The effective reduction in the issued and paid-up share capital of the Company pursuant to the Proposed Share Buy-Back would generally, all else being equal, increase the consolidated EPS of the Company. However, the Proposed Share Buy-Back, if exercised, is not expected to have any material effect on the NA per share and EPS of the Company for the financial year ending 31 December 2020.

(d) Working Capital

The Proposed Share Buy-Back will reduce the working capital of the Company, the quantum of which depends on the purchase price(s), the number of Shares bought back and the effective funding costs thereof.

6. IMPLICATION OF THE MALAYSIAN CODE ON TAKE-OVER AND MERGERS, 2010, AS AMENDED FROM TIME TO TIME AND ANY RE-ENACTMENT THEREOF (“CODE”)

Based on the Company’s issued and paid-up share capital and the shareholdings of the substantial shareholders of the Company as at LPD, the Proposed Share Buy-Back is not expected to trigger any obligation by the substantial shareholders of the Company and/or parties acting in concert with them to undertake a mandatory offer under the Code. The effect on the shareholdings of the substantial shareholders of the Company after the implementation of the Proposed Share Buy-Back is shown in Section 3 of this Statement.



7. PURCHASE AND RESALE OF ITS OWN SHARES IN THE PROCEEDING 12 MONTHS

APT does not have any transaction on purchase and resale of its own shares in the preceding twelve (12) months prior to the LPD.

8. PRICING

(a) APT shall purchase its own Shares or resell its treasury shares (if applicable) only on the market of Bursa Securities. The price for the purchase shall not be more than fifteen percent (15%) above the weighted average market price of APT Shares for the five (5) market days immediately preceding the date of purchase.

(b) If the Purchased Shares are subsequently resold on Bursa Securities, the price for the resale of Treasury Shares shall:-

(i) not be less than the weighted average market price for APT Shares for five (5) market days immediately prior to the resale; or

(ii) not be more than 5% to the weighted average market price for APT Shares for five (5) market days immediately prior to the resale provided that:-

(aa) the resale takes place no earlier than 30 days from the date of the purchase; and

(bb) the resale price is not less than the cost of purchase of the Purchased Shares being resold.

9. SHARE PRICES

The following table sets out the monthly highest and lowest transacted prices of the Company’s Shares on Bursa Securities for the last twelve (12) months from June 2019 to May 2020:

Year Highest (RM) Lowest (RM)

2019 - June 1.98 1.89 July 1.89 1.74 August 2.25 1.75 September 2.25 1.86 October 2.23 1.94 November 2.40 1.98 December 2.30 2.06 2020 - January 2.30 2.16 February 2.27 2.00 March 2.18 1.68

April 2.10 1.80 May 2.00 1.87

(Source: shareinvestor.com)

The last transacted price per share unit of the Company on 19 June 2020, was RM1.93.



10. TREATMENT OF SHARES PURCHASED

In accordance with Section 127 of the Act, the Company is allowed to deal with the Purchased APT Shares in the following manner:-

(a) to cancel the Purchased APT Shares; or

(b) to retain the Purchased APT Shares as Treasury Shares, for distribution as share dividends to the shareholders, resell on the Bursa Securities, transfer for the purpose of or under an employees’ share scheme, transfer as purchase consideration, cancel the Purchased APT Shares; transfer or otherwise use the shares for such other purposes as the Minister may by order prescribe;

(c) to retain part of the Purchased APT Shares as Treasury Shares and cancel the remainder; or

(d) to deal in such other manner as the Bursa Securities and such other relevant authorities may allow from time to time.

The decision as whether to retain the Purchased APT Shares as Treasury Shares, or to cancel the Shares purchased or a combination of both, will be made by the Board of APT at the appropriate time.

11. PUBLIC SHAREHOLDING SPREAD

As at 31 December 2019, the public shareholding spread of the Company was 61.54%. Assuming that the Proposed Share Buy-Back is carried out in full and the Shares so purchased are from the public shareholders, the public shareholding of the Company would be reduced to approximately 60.17%.

12. DIRECTORS’ RECOMMENDATION

The Board of Directors, having considered all aspects of the Proposed Share Buy-Back, is of the opinion that the Proposed Share Buy-Back is in the best interest of the Company and therefore recommends for the shareholders to vote in favour of the ordinary resolution no. 12 on the Proposed Shareholders’ Mandate for Share Buy-Back at the forthcoming Thirty-Eighth AGM of the Company.

13. DIRECTORS’ RESPONSIBILITY STATEMENT

This Statement has been seen and approved by the Directors of APT and they collectively and individually accept full responsibility for the accuracy and correctness of the information contained in this Statement and confirm that, after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement in this Statement misleading.

14. DOCUMENTS FOR INSPECTION

The following documents are available for inspection at the Registered Office of the Company during normal office hours on any business day falling from the date of this Statement and up to the time set for convening the Thirty-Eighth AGM:

(a) Constitution of APT; and(b) Statutory Financial Statements of APT for the past two years ended 31 December 2018 and 31

December 2019.

This Statement was approved by the Board on 19 June 2020.


Corporate Information

BOARD OF DIRECTORS

Datuk Ismail bin Haji Ahmad (Chairman)Yeo Tek Ling (Re-designated as Managing Director on 1 January 2020)Dato’ Haji Ghazali B. Mat Ariff Mah Siew Seng Ng Choo TimLaw Mong YongPang Chong Yong (Appointed on 16 June 2020) Andrew Ling Yew Chung(Appointed on 18 June 2020)Tjin Kiat @ Tan Cheng Keat (Managing Director)(Resigned on 31 December 2019)Chee Chin Hung - (Resigned on 25 October 2019) SECRETARIES

Leong Shiak Wan Practicing Certificate No. 202008002757(MAICSA 7012855)Zuriati Binti YaacobPracticing Certificate No. 202008003191 (LS0009971) AUDITORS

PKF AF 0911Chartered Accountants AUDIT COMMITTEE

Dato’ Haji Ghazali B. Mat Ariff (Chairman)- Senior Independent Non-Executive DirectorDatuk Ismail bin Haji Ahmad- Independent Non-Executive DirectorMah Siew Seng- Independent Non-Executive Director

REMUNERATION COMMITTEE

Dato’ Haji Ghazali B. Mat Ariff (Chairman)- Senior Independent Non-Executive DirectorMah Siew Seng- Independent Non-Executive Director

NOMINATION COMMITTEE

Dato’ Haji Ghazali B. Mat Ariff (Chairman)- Senior Independent Non-Executive Director Ng Choo Tim- Independent Non-Executive Director

REGISTERED OFFICE

Level 12, Menara SymphonyNo. 5 Jalan Prof. Khoo Kay KimSeksyen 1346200 Petaling JayaSelangor Darul EhsanTel: 03-7890 4800Fax: 03-7890 4650

REGISTRAR & SHARE TRANSFER OFFICE

Boardroom Share Registrars Sdn BhdLevel 11, Menara SymphonyNo.5 Jalan Prof. Khoo Kay KimSeksyen 13,46200 Petaling JayaSelangor Darul EhsanTel: 03-7890 4700Fax: 03-7890 4670 PRINCIPAL BANKER

CIMB Bank Berhad STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

Website : www.advancedpack.com.my


DATUK ISMAIL BIN HAJI AHMAD Age : 83 Gender : MaleMalaysianChairman (Independent Non-Executive Director).

Datuk Ismail bin Haji Ahmad was appointed as the Chairman of the Company on 31 May, 2018. He was first appointed to the Board on 30 December 1998. He is currently a member of the Audit Committee.

He holds a Bachelor of Arts (Hons) degree from the University of Malaya, and a Master degree in Public Policy and Administration from the University of Wisconsin, United States of America. He has attended the Senior Management Programme conducted by the Harvard Business School.

Datuk Ismail joined the Administrative and Diplomatic Service in 1964 and had served in the Prime Minister’s Department, Ministry of Home Affairs and Ministry of Primary Industries. He served as the Chief Executive Officer of the Commodities Trading Commission from 1981 to 1995. Datuk Ismail was the Chairman of Bank Muamalat Malaysia Berhad from 1999 to 2004.

He does not have any family relationship with any director and/or major shareholder of the Company. There is no conflict of interest between him and the Company. He has not been convicted of any offence within the past ten years.

He does not hold any shares in the Company.

YEO TEK LING Age : 61 Gender : MaleMalaysianManaging Director (Non-Independent Executive Director)

Mr.Yeo Tek Ling, was appointed as the Managing Director of the Company on 01 January, 2020. He is now the principal officer of the Company and is responsible for the overall management of the Company’s business and operations.

He was appointed to the Board on 6 January 1994 and assumed the position of Finance Director in January 1996. He first joined the Company in October 1985 as an Accountant and subsequently became the Finance & Administration Manager and Corporate Planner.

He was attached to Associated Pan Malaysia Cement Sdn Bhd as an Assistant Accountant for three years prior to joining the Company.

In his previous role as Finance Director until 31 December, 2019, Mr. Yeo was responsible to oversee the accounting and financial reporting, taxation, financial management, corporate finance, supply chain, ISO 9001 Quality Management Systems, corporate and administrative matters of the Company. He also assisted the former Managing Director from time to time in management and other operational matters. He has involved in the installation of major machineries and Good Manufacturing Practice (GMP) project. He had assisted in turning around the Company in the initial years of operations. He also assisted the Company in obtaining public listing in 1994 and the ISO 9002 certification in year 2000 as well as the subsequent upgrading to ISO 9001:2000 in 2003, ISO 9001:2008 in 2009 and ISO 9001:2015 in 2018.

Directors’ Profile


He is a member of the Malaysian Institute of Accountants (MIA) and the Chartered Institute of Management Accountants (CIMA), U.K. and a Chartered Global Management Accountant. He was a council member of MIA and CIMA Malaysia Division. He was also a Board Member of the Association of International Certified Professional Accountants (formed by CIMA, U.K. and the American Institute of Certified Public Accountants) for South East Asia Region. He had served previously as the Chairman of the Malaysia Country Branch Committee of CIMA during the term 2013/2014 and 2016/2017. He had also served as a member of the Professional Accountants in Business Committee of the International Federation of Accountants, New York for a period of six (6) years from 2002 to 2007.

He does not have any family relationship with any director and/or major shareholder of the Company. There is no conflict of interest between him and Company.

He does not hold directorships in any other public companies. He has no record of conviction for any offence within the past ten years. He holds 12,169 ordinary shares in the Company.

NG CHOO TIM # Age : 68 Gender : MaleMalaysianDirector (Independent Non-Executive Director)

Mr Ng Choo Tim, was appointed a Board member on 29 June 1989. He is a member of the Nomination Committee.

Mr Ng was a partner of Syarikat Guan Seng for many years, a company trading in electrical products and furniture which had ceased operation.

He does not have any family relationship with any director and / or major shareholder. There is no conflict of interest between him and the Company. He does not hold directorships in any other public companies. He has not been convicted of any offences within the past ten years.

He holds 648,297 ordinary shares in the Company.

DATO’ HAJI GHAZALI B. MAT ARIFF Age : 79 Gender : MaleMalaysianDirector (Independent Non-Executive Director)

Dato’ Haji Ghazali B. Mat Ariff is the Senior Independent Non-Executive Director of the Company. He was appointed to the Board on 23 March 1994. He is the Chairman of the Audit Committee, Nomination Committee and Remuneration Committee.

Dato’ Ghazali is an Advocate and Solicitor. He qualified as a Barrister-at-Law from Lincoln’s Inn, London and was called to the English Bar on 21 November 1978. He was admitted as an Advocate & Solicitor of the High Court of Malaya on 27 September 1979. He set up a legal firm in March 1980 which is now known as Ghazali Ariff & Partners and is currently the Senior Partner of the firm.

He worked as a legal assistant at Messrs. Nik Hussain, Ibrahim & Abdullah, Kuala Lumpur from 1979 to 1980. Prior to that, he was a college trained teacher at Chung Hwa Confucian High School Penang from 1962 to 1968 and a lecturer at Sultan Hassanal Bolkiah Teachers’ Training College Brunei Darussalam from 1968 to 1974.

Apart from Advanced Packaging Technology (M) Bhd, Dato’ Ghazali sits on the Board of Amalgamated Industrial Steel Berhad. In September 2007, Dato’ Ghazali assumed the position as Chairman of Amalgamated Industrial Steel Berhad. He also sits on the Board of several private limited companies.

Directors’ Profile (cont’d)


Dato’ Ghazali is the past President of The Malay College Old Boys’ Association (MCOBA). He was the Vice President of Jemaah Dato’- Dato’ Perlis from 2004 to 2014. He was appointed as a Commissioner for Oaths from 1995 till 2005. From September 1995 to December 1999, he was the Honorary Vice Consul of the Republic of Finland in Kuala Lumpur. Dato’ Ghazali was also the Honorary Legal Advisor of Malaysia Thai Association from 1999 to 2002.

He has no conflict of interest with the Company and has not been convicted of any offence within the past ten years. He does not have any family relationship with any director and/or major shareholder of the Company.


MAH SIEW SENG # Age : 67 Gender : MaleMalaysianDirector (Independent Non-Executive Director)

Mr. Mah Siew Seng is a Chartered Certified Accountant by profession. He was appointed to the Board on 23 March 1994. He is a member of the Audit Committee and Remuneration Committee.

He is a member of the Malaysian Institute of Accountants, a fellow member of the Association of Chartered Certified Accountants, a fellow member of the Chartered Tax Institute of Malaysia (formerly known as Malaysian Institute of Taxation). He practices as a Chartered Accountant in Teluk Intan under the name of Messrs. Mah Siew Seng & Co since 1982.

Mr Mah does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interest with the Company. He is not a director of any other public companies but sits on the Board of several private limited companies. He has not been convicted of any offence within the past ten years.


LAW MONG YONG Age : 61 Gender : MaleMalaysianDirector (Non-Independent Non-Executive Director)

Mr Law Mong Yong was appointed a Director on 17 November, 2017. He holds a Bachelor of Applied Science (Elec & Mgm) degree from University of Melbourne, Victoria, Australia.

He has over 30 years experience in various business fields such as retailing of electrical products, sales and finance of motor vehicles, credit and leasing, general insurance, food manufacturing which includes confectionery (hard boiled candies) and canned tropical fruits, timber logging, fruit farming, plantations and swiftlet farming as well as bird nest processing. He is the treasurer of Kelantan Bird’s Nest Merchants Association.

He does not have any family relationship with other directors and / or major shareholders. There is no conflict of interest between him and the Company. He does not hold directorships in any other public companies. He has not been convicted of any offences within the past ten years. He holds 459 ordinary shares in the Company.



PANG CHONG YONG # Age : 61 Gender : MaleMalaysianDirector (Non-Independent Non-Executive)

Mr Pang Chong Yong was appointed a Director on 16 June, 2020. He holds an IME, Mini MBA, Executive Certificate in Business Management, International Management Education, Singapore.

He has over 30 years’ experience in the installation of vehicles and bus manufacturing.

He is the co-founder of Gemilang Coachwork Sdn Bhd and has been the Chief Executive Director/Managing Director of the Company since its incorporation in 1989. He is also the Chief Executive Officer of Gemilang International Limited since its listing on the Main Board of the Stock Exchange of Hong Kong in November, 2016.

He has seasoned experience in formulating corporate strategies and policies, as well as carrying out general management and day-to-day operations. Prior to the founding of Gemilang Coachwork, Mr Pang has over 10 years experience in the installation of cars accessories and provision of after–sales services.

He does not have any family relationship with other directors and / or major shareholders. There is no conflict of interest between him and the Company. He has not been convicted of any offences within the past ten years.

He holds 1,593,493 ordinary shares in the Company.

ANDREW LING YEW CHUNG # Age : 29 Gender : MaleMalaysianDirector (Non-Independent Non-Executive)

Mr Andrew Ling Yew Chung was appointed a Director on 18 June, 2020. He is a qualified CPA from Australia and obtained a Bachelor of Commerce – Accounting & Finance from the University of Melbourne, Australia. He was a licenced investment banker based in Hong Kong.

From 2013 to 2015, he served in audit and assurance for EY Malaysia and was engaged to a diverse range of clients including listed companies, and companies engaged in manufacturing and technology. In 2016, he worked in corporate finance with Gemilang International Limited and its principal subsidiary to assist with their corporate exercises. From 2017 to 2020, he served in corporate finance and investment banking with Alliance Capital Partners Limited in Hong Kong, where he advised and assisted with the listing and corporate exercises of various companies located in Hong Kong, Singapore and Mainland China.

He is the son of Mr Peter Ling Ee Kong who is a substantial shareholder of the Company. There is no conflict of interest between him and the Company. He has not been convicted of any offences within the past ten years. He does not hold any ordinary share in the Company.

# Director standing for re-election



Profile of Key Senior Management

YEO TEK LING Age : 61Gender : MaleMalaysianManaging Director (Non-Independent Executive Director)

Mr.Yeo Tek Ling, was appointed to the Board on 6 January 1994 and assumed the position of Finance Director in January 1996. He was appointed as the Managing Director of the Company on 01 January, 2020. He is now the principal officer of the Company and is responsible for the overall management of the Company’s business and operations.

His personal profile is listed in the Directors’ profile in this annual report.

TEOH EE YEONGAge : 50Gender : MaleMalaysianGeneral Sales Manager

Mr Teoh Ee Yeong first joined the Company on 16 November, 1992 as a Sales Representative and later as Senior Sales Representative, Sales Executive, Area Sales Manager and Sales Manager. He Assumed the position of Acting General Sales Manager from 01 January, 2013 to 31 December, 2019. He is the General Sales Manager effective from 01 January, 2020. He is responsible for the overall marketing and sales activitiesof the Company. Mr Teoh obtained a Bachelor of Arts in Business and Marketing from Oxford Brookes University in 2000.

He does not hold directorship in any public listed companies. He is the nephew of Mr Tan Cheng Keat, the former Managing Director of the Company and previously a major shareholder. He has not been convicted of any offence within the past five years.

SAK KON FOONG Age : 63Gender : Female MalaysianFinance and Administration Manager

Ms Sak was appointed as the Finance and Administration Manager on 01 January, 2020 and primarily responsible for the accounting, financial reporting, costing, taxation, financial and administration matters of the Company. She first joined the Company on 01 March, 1984 as an Assistant Accountant and was promoted to Accountant on 01 January, 1988.

She is also the Lead Auditor of the Internal Quality Audit for the Company’s Quality Management System on ISO 9001.

She is member of the Malaysian Institute of Accountants (MIA) and the Chartered Institute of Management Accountants (CIMA), U.K. and a Chartered Global Management Accountant.

She is not a director of any public listed companies and she has not been convicted of any offence within the past five years.


Profile of Key Senior Management (cont’d)

MOHAMAD SALLEH BIN HAWARIAge : 51Gender : MaleMalaysianActing Quality Controller

Encik Mohamad Salleh Bin Hawari has more than 10 years of relevant experience in quality control in flexible packaging materials converting industry. He obtained a Diploma in Banking Studies from ITM. He has attended training in quality control and quality management system.

He was appointed to the current position on 06 June, 2009. He first joined the Company as Trainee Assistant Quality Controller on 01 August, 2003. He is responsible for the quality control function of the Company.

He is not a director of any public listed companies. He has not been convicted of any offence within the past five years.

MD AINI BIN MUSTARIAge : 48 Gender : MaleMalaysianProduction Manager

Encik Md Aini Bin Mustari has about ten (10) years of production operations experience in flexible packaging materials converting industry. He holds a Executive Diploma in Quality Management from Universiti Teknologi Malaysia in 2007. Before he re-joined the Company as Production Manager on 18 January, 2010, he was the Quality Controller from 1998 to 2009.

He is responsible for the production operations and ensures smooth and efficient running and proper housekeeping and cleanliness of the production floor. He is the Management representative of the ISO quality management system of our company. He is not a director of any public listed companies. He has not been convicted of any offence within the past five years.


Sustainability Statement

Advanced Packaging Technology (M) Bhd (“Company”) recognises sustainability is an integral part of its business operations. The Company has always adhered to the three pillars of sustainable development, namely, economic, environmental and social considerations to ensure that our operations support sustained growth and business performance to best meet and balance the interests of our various stakeholders.

ScopeThe Company’s sustainability framework is premised upon the evaluation of the economic, environmental and social (“EES”) risk and opportunities in accordance with Bursa Malaysia Securities Berhad’s Sustainability Reporting Guide.

Sustainability Governance The Board of Directors (“Board”) is overall responsible to promote and ensure sustainability is embedded in the business operations of the Company. The implementation is headed by the Managing Director and all departmental heads are involved in the supervision of the sustainable practices and operations by developing and implementing sustainability initiatives.

The Company manages sustainability issues under the following areas:

Material Sustainability MattersThe Company considers those sustainability matters as material when they have a significant impact on economic, environmental and social (“EES”) risk and opportunities.

1) Economic Sustainable Business Growth As sustainability is an integral part of our way of doing business, our strategy is to ensure that there is a sustainable

business growth over a longer term rather than a short term view on operations and profitability so that the interest of all stakeholders are taken care off in the long run.

In line with this practice, the Company continues to invest in new machineries, equipment and other resources to remain cost competitive and efficient in its business operations as well as producing quality products to meet customers’ stringent requirements. We strive to work harder on people management to train and groom talent and optimise work strength across all operations.

Good Corporate Governance and Business Practices It is the intention of the Company to operate its business with sound practices and good corporate governance

to ensure that the Company is a responsible and reliable one in order to sustain its operation and benefit all stakeholders.

The Company views the compliance of laws, rules and regulations are equally important. It believes these are part of the important elements of a sustainable business operation in the long term.

Product Quality The Company works closely with major customers and suppliers for better partnership in order to achieve

better value which is beneficial to both organisations in the long run. Product quality is critical to our Company’s performance and reputation. As such, the Company’s Quality Management System is certified to ISO 9001:2015 standard. This helps to manage our products in meeting customers’ quality specifications and satisfy their requirements.

Various measures were implemented in checking the product quality during processing and post processing. Data and results were recorded for performance evaluation and analysis as well as for problems solving and future reference.

Customer satisfaction We place our customers and their interest at the heart of our business. As customers are important to the success

of the Company, regular evaluation of customer satisfaction through a half yearly survey was carried out and the results have shown an average of high score of overall customer satisfaction across product quality, reliability, delivery, service, pricing and responsiveness.

Continuous improvement to further satisfy customers’ requirements is always in the agenda of the Company.

Supply Chain Management We practise and promote a fair and transparent supply chain management through supplier evaluation and

selection, price competitiveness comparison and supplier performance review. This has enabled us to procure quality products and services at competitive prices. As such, raw materials used in manufacturing will only be sourced from approved suppliers to ensure consistency of quality of supplies and prompt delivery.

Supplier performance review was carried out regularly based on performance data collected for a period of time with certain criteria. The results shown over 80% of the suppliers have performed satisfactorily.

The Company endeavours to contribute to the local economy by way of supporting procurement of products and services from local companies whenever possible.


Sustainability Statement (cont’d)

2) Environment As environment has been a core issue to the world, the Company has taken environmental matters as part of its

good business practices towards sustainability in preserving the environment in which it operates. Below are some of the key areas that the Company has taken steps to minimise the impact to the environment.

Compliance The Company has always committed to comply with legal and regulatory requirements of the relevant

authorities such as Malaysian Department of Environment (“DOE”) which governs plant and factory operations and maintenance in areas relating to environment and emission standards, fuel usage, noise level and treatment of plant discharge, effluents and waste water.

Management of Manufacturing Waste Since the Company is involved in manufacturing and waste is a normal norm and inevitable in any manufacturing

process. However, the Company has always strived to minimise the waste level by setting target and close monitoring of its achievement. Sectional wastage level of each manufacturing process was set on yearly basis, data recorded and compiled and compared monthly for close monitoring. Some sections performed within target while certain sections were not able to achieve the set target. More efforts for improvement in minimising manufacturing waste are being taken on a continuing basis.

Solid wastes are segregated into various categories for disposal to recycling companies or collected by waste disposal companies as approved by the relevant authority. Scheduled wastes of chemical nature are collected by DOE approved company for safe disposal.

Conservation of Energy Better and more efficient machineries/equipment were used with proper scheduling as a way to better use of

energy resources. Energy efficient air conditioners and lighting bulbs were installed to replace the old units which consumed higher energy. Lighting and air conditioning were switched off whenever not in used.

3) Social The Directors believed that the Company is socially responsible to strike a balance between profitability and

its social obligations. Therefore, the Company will continue to operate with care and as a responsible corporate citizen in discharging its social sustainability efforts.

Human Resources Employees are the key assets and one of the pillars of success of the Company. As its success is the result of

the employees’ collective efforts and hard work at the workplace, the Company strives to balance between responsibility, performance and reward to its employees.

The Company has complied with local labour laws and regulations and implemented the minimum wages policy of the government. The terms and conditions of employment are the same for all employees in the same category without any form of discrimination as the Company believes in human rights and equal opportunities for all employees. Workplace diversity in terms of age, gender and ethnicity is being embraced by the Company for inclusiveness.

The Company recognises the importance of its employees as one of the most valuable and important asset of the Company, pro-active action has been taken by the Company in ensuring continuous human capital development by making available training and career advancement opportunities.

The Company also acknowledges that continuous training and human capital development will better equip its employees in the workplace and produce better performance results for the Company. As such, both external and in-house training programmes were provided or conducted on a regular basis to enhance the skill and knowledge as well as job performance of its employees. Targets were set for training for new employees and other employees on a yearly basis.

The Company also ensures that its employees are adequately provided for with medical benefits and insurance coverage together with a competitive remuneration. Dinner / trip were organized from time to time for the employees as part of the benefits.

Occupational Health and Safety Management The Company is committed to comply with the relevant laws and regulations as laid down by the Department

of Occupational Health and Safety (“DOSH”). This is to ensure safety and health issues in the workplace are not compromised.

It has a Safety and Health Committee to oversee the safety and occupational health issues in the workplace. Protective gears were given to its factory and production staff/workers for better protection. Preventive measures such as safety briefing and fire drills were conducted on site to enable the employees to better understand certain safety issues and to react quickly in time of emergency.

No major industrial accident has happened so far except minor injuries have happened but the number of incident is low.

This statement was approved by the Board on 10 June 2020.


Corporate Governance Overview Statement

The Board of Directors (“the Board”) of Advanced Packaging Technology (M) Bhd acknowledges the importance of having a good corporate governance framework in conducting the business and affairs of the Company in order to enhance shareholders’ value and the financial performance of the Company while taking into account the interest of other stakeholders. In order to achieve the above objectives, a proper and practical framework for governance and controls has been established and implemented by the Company that are in line with the principles of and best practices in corporate governance as recommended in the Malaysian Code on Corporate Governance issued by the Securities Commission on 26 April, 2017 (“the Code”).

Pursuant to Paragraph 15.25 of the Listing requirements of Bursa Malaysia Securities Berhad, the statement below outlines the manner in which the Company has applied the principles and the extent of its compliance of the Code for the financial year ended 31 December 2019.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVESS

I. BOARD RESPONSIBILITIES

1.1 Role and Responsibilities of the Board

The Board’s principal roles and responsibilities are establishing goals, setting strategic direction and overseeing investments and conduct of the Company’s business, business and financial performance as well as risk management and integrity of internal control. It provides leadership, strategic direction and advice to the Company and guides the Company in achieving its objectives and addressing succession planning, sustainability, stakeholder interests and corporate communications.

The Board of Directors has established clear roles and responsibilities in discharging its fiduciary duties and leadership functions. The Directors are fully aware of the dual role of leadership and control for it to be effective. They are also conscious of the need to practising good corporate governance in the discharge of their stewardship responsibilities to protect the various stakeholders’ interest and the Company’s assets and to enhance the Company’s performance.

The Board is supported by various Board Committees to carry out its oversight of management to ensure appropriate checks and balances are in place and carrying out performance review. The Chairman of the Board and Board Committees are assisted by Management and the Company Secretary in undertaking their responsibility of organising and ensuring that notices of meetings, agenda papers and other relevant information are supplied on a timely basis and tabled for the Board and Board Committees to function effectively.

1.2 Chairman

The Chairman of the Company is an Independent and Non-Executive Director and he is primarily responsible for providing leadership to the Board and ensures its effectiveness in discharging its duties and responsibilities. He is also responsible for instilling good corporate governance practice.

1.3 Chairman and CEO

The positions of Chairman and CEO are held by two separate individuals and their roles and respon-sibilities as the Non-Executive Chairman and the Managing Director are clearly divided to ensure a balance of power and authority.

The Chairman provides leadership to the Board and monitors its effectiveness while the Managing Director manages the overall business operation.

1.4 Company Secretary The Board is supported by the two Company Secretaries who are well qualified with the relevant

qualification and they have the required experience and are competent to discharge their duties and responsibilities.


They are responsible for all the secretarial function of the Company and provide the Board with the relevant governance advice from time to time and ensure adherence to rules and procedures.

1.5 Information and Meeting Papers

All relevant agenda, Board papers and reports for each meeting are circulated to Directors in advance of the meeting. When requested by the Board or Board Committees, additional information is promptly supplied to enable them to effectively discharge their responsibilities. Minutes of the meeting are circulated subsequently before the next meeting.

1.6 Directors’ Training

The Board acknowledges that appropriate training programmes for the Directors will keep them abreast with developments in market place as well as increase their knowledge and understanding of recent developments in laws, regulations and business practices.

All Directors have attended and completed the Mandatory Accreditation Programme (MAP) as required by the Bursa Malaysia Securities Berhad. The Directors have also attended various accredited programmes under the Continuous Education Programme (CEP) conducted by various course/training providers and met the prescribed CEP requirements.

The Company Secretary has from time to time updated the Directors on the Company Laws, the Code and the amendments to Bursa Malaysia Securities Berhad Main Market Listing Requirements in relation to disclosure and other obligations.

Apart from the above, other training programmes, seminars, workshops attended by some of the Directors individually are as follows:

Dato’ Haji Ghazali B. Mat Ariff1) 08 November, 2019 – Audit Oversight Board Conversation with Audit Committee by Audit

Oversight Board;2) 20 November, 2019 – Housing Conference 2019 (Making Affordability the new Norm) organized

by REHDA Institute.

Mr. Mah Siew Seng1) 17-18 August, 2019 – Macro View and Implementing ISQC1 organized by Malaysian Institute of

Accountants (MIA); 2) 05 November, 2019- 2020 Budget Seminar organized by MIA.

Mr. Yeo Tek Ling 1) 17 April, 2019 - Roundtable on MIA-ACCA Business & Economics Outlook Report 2019 organized

by Malaysian Institute of Accountants (MIA)/ACCA;2) 27 June, 2019 - Cyber Security in the Boardroom organized by Bursa Malaysia/Deloitte;3) 23 August, 2019 – The Convergence of Digitisation and Sustainability organized by Bursa Malaysia/

Institute of Corporate Directors Malaysia (ICDM);4) 11 September, 2019 – MIA’s Directors’ Dialogue with Jonathan Labrey on Integrated Reporting

organized by Bursa Malaysia/ MIA;5) 23 September, 2019 – Sustainability Inspired Innovations: Enablers of the 21st Century organized

by Bursa Malaysia / ICDM;6) 31 October, 2019 – Session on Corporate Governance and Anti-Corruption organized by Bursa

Malaysia/Securities Commission;7) 05 November, 2019 – Workshop on Corporate Liability Provision (Section 17A) of the MACC Act

2009 organised by Bursa Malaysia;8) 21 November, 2019 – MIA’s CFO Circle Luncheon Talk – Having Adequate Procedure - How

Adequate is Actually Adequate? organized by MIA.

Corporate Governance Overview Statement (cont’d)



2.1 Board Charter

The Board Charter which outlines the roles, responsibilities and functions of the Board was published on the Company’s website at www.advancedpack.com.my. The Board Charter is a source reference to ensure that all Board members are aware of their duties and responsibilities as Director. The Board charter is reviewed as and when necessary to do so.

3.1 Code of Conduct and Ethics

The Board is committed to maintain a corporate culture with good ethical conduct. The Directors have always been mindful of conducting themselves in an ethical manner when discharging their duties and responsibilities and complied with the Code of Ethics for Company Directors issued by the Companies Commission of Malaysia and published at its website at www.ssm.com.my/code-ethics-company-directors.

3.2 Whistle-blowing

A whistle-blowing policy has been implemented and is available for stakeholder’s viewing / further action on the Company’s website at advancedpack.com.my. The Board views the current control procedures in addition to the whistle-blowing policy are adequate for its operation for the time being.

II BOARD COMPOSITION

4.1 Independent Directors The Board has six members with one Executive Director and five Non-Executive Directors currently,

of whom four are Independent and its composition is in compliance with paragraph 15.02 of the Bursa Malaysia Securities Berhad Listing Requirements which requires at least one third of the Board to comprise of independent directors.

The presence of Independent Non-Executive Directors fulfills a pivotal role in corporate governance accountability. Dato’ Haji Ghazali B. Mat Ariff was appointed on 28 May 2002 as the senior independent non-executive director to whom all concerns regarding the Company may be conveyed.

4.2 Tenure of Independent Directors

The Board recognises the importance of independence and objectivity in the decision making process by the independent directors. They expressed their views and opinions freely on subject matter without constraint. The Board through the Nomination Committee has assessed the independent directors annually and is of the opinion that all the four Independent Directors continue to demonstrate conduct and behavior that are essential indicators of independence.

Three out of the four Independent Directors who have served more than twelve years are Dato’ Haji Ghazali B. Mat Ariff, Mr. Mah Siew Seng, and Mr Ng Choo Tim. As such, the Board would seek shareholders’ approval in the coming Annual General Meeting through a 2-tier voting process to retain the three Independent Directors that have served more than twelve years.

4.3 Policy on Tenure of Independent Directors

There is no policy currently to limit the tenure of Independent Directors by the Board in view of the fact that the current Independent Directors have demonstrated their independency in discharging their duties and responsibilities.


4.4 Appointment of Board Members and Senior Management

The Board is mindful of the need to be objective in the proper selection of new Director that qualification, experience and skill, age and gender are the key factors to consider.

Board members possess a diverse mix of skills and experience in either business or professional practices and this is crucial to the proper running of the Company. The executive directors’ knowledge of the business operation is complemented by the independent non-executive directors’ objective and unbiased judgment at board deliberations.

4.5 Policy on Gender Diversity

There is no official policy currently in regards to gender diversity for appointment of Director. The Nomination Committee and the Board had deliberated before and concluded that the selection of candidate for directorship of the Company should preferably be based on capability and experience of a person instead of just on gender.

However, the Board is receptive to the appointment of suitably qualified women Director when there is a vacancy.

4.6 Candidates for Appointment of Director

The Board has taken a serious view of the diverse channels that could be used to identify suitably qualified candidates for appointment as future Director when the need arises.

4.7 Chairman of Nomination Committee

The Nomination Committee is currently chaired by the Senior Independent Director, Dato’ Haji Ghazali B. Mat Ariff. He leads the discussion on the appointment of new Directors and evaluation of Board Committees and Dircetors.

4.7.1 Nomination Committee

The Nomination Committee was established on 27 February 2002 by the Board and it currently comprises of two independent non-executive directors as below:-

(i) Dato’ Haji Ghazali B. Mat Ariff (Chairman) (Senior independent non-executive director); and (ii) Mr Ng Choo Tim (independent non-executive director).

The terms of reference of the Nomination Committee are:-

1. Constitution

The Nomination Committee shall be appointed by the Board of Directors from amongst its members and composed exclusively of non-executive directors, a majority of whom are independent. The Chairman of the Nomination Committee should be the Senior Independent Director identified by the Board.




2. Frequency of meeting

The Nomination Committee shall meet at least once a year to carry out the duties and responsibilities in item (3) as stated below. The Nomination Committee shall meet at least once a year to assess the effectiveness of the Board as a whole, the committees of the Board and for assessing the contribution of each individual director. The quorum for a meeting shall be two members.

In the absence of the Chairman of the Nomination Committee, members present shall elect a Chairman for the meeting.

3. Duties and Responsibilities

The Nomination Committee shall be responsible for the following:-

(a) Propose new nominees for the board; (b) Make appropriate recommendations to the Board on matters of renewal or extension of directors’

appointment and reappointment of retiring directors; (c) Consider, in making its recommendations, candidates for directorships proposed by the Chief

Executive Officer and, within bounds of practicability, by any other senior executive or any director or shareholder;

(d) Recommend to the Board, directors to fill the seats on Board committees; (e) Assess directors on an ongoing basis; (f ) Review annually and assess performance of non-executive directors on annual basis; based on

skills, experience and core competencies which non-executive directors should bring to the board and submit its recommendations to the board;

(g) Carry out a process implemented by the board on an annual basis for assessing the effectiveness of the board as a whole, the committees of the board and for assessing the contribution of each individual director.(h) Review annually the term of office and performance of audit committee members to determine

whether such audit committee has carried out their duties in accordance with their terms of reference.

The terms of reference of the Nomination Committee are also available at the Company’s website at www.advancedpack.com.my.

5.1 Annual Assessment

The Nomination Committee reviews annually the effectiveness of the Board and Board Committee as well as the performance of individual Directors.

The process of evaluation involve individual Directors and Board Committee members completing a set of separate questionnaires regarding the processes of the Board and its Committees and their effectiveness base on the criteria guided by the Corporate Governance Guide – Towards Boardroom Exellence. A peer and self-review assessment will also be carried out where Directors will assess their own performance and that of their fellow Directors.

The results will then be summarised and presented to the Nomination Committee for discussion, review and decision taken will be recorded and the Chairman will report the same to the Board at the next Board Meeting.


III REMUNERATION

6.1 Policy on Remuneration

There is no written policy on remuneration currently. However, factors or guidelines that have been taken into account by the Remuneration Committee in its meeting to determine remuneration of Directors and senior management are qualification, skill and experience, performance of the individual and the Company as well as the responsibility of each individual.

Remuneration package of the executive directors was reviewed by the Remuneration Committee annually in their meeting taking into account the responsibilities and performance of each Executive Director and recommends to the Board of Directors for approval. It is then decided by the Board without the executive directors’ participation in determining their own remuneration. The Board links the remuneration of executive directors to corporate and individual performance and that of the non-executive directors be reflective of their expertise and level of responsibilities. Directors’ Fees were only paid upon approval by shareholders at the Company’s annual general meeting based on the recommendation of the Board. Any changes in Directors’ Fees are highlighted in the notice calling for the annual general meeting.

6.2 Remuneration Committee

The Remuneration Committee was set up on 27 February 2002 and it currently has two independent non-executive directors.

It is responsible for recommending to the Board the remuneration of the non-executive directors and executive directors in all its forms, and where necessary, draws advice from outside.

Members of the Remuneration Committee are :-

(i) Dato’ Haji Ghazali B. Mat Ariff (Chairman, Senior independent non-executive director); and(ii) Mr Mah Siew Seng (independent non-executive director).

The Remuneration Committee met once with full attendance during the year to discuss and review the remuneration policy and remuneration of the Directors and recommended to the Board for further action and decision.

The terms of reference of the Remuneration Committee are available at the Company’s website at www.advancedpack.com.my.

7.1 Directors’ Remuneration

In view of the confidentiality and sensitivity of the disclosures, details of individual director’s remuneration are not disclosed herewith. However, set out below are the details of the Directors’ remuneration received, receivable and inclusive of the recommended directors’ fees in respect of the financial year ended 31 December 2019, distinguishing between Executive and Non-Executive Directors of the Company. Please note that the remuneration of the former Managing Director is included here.




Salary 471,240.00 -

Fees 60,000.00 175,000.00

Bonus - -

Benefits-in-kind 18,625.00 -

EPF & Socso 104,964.00 -

Others 18,000.00 -

Meeting allowances 11,000.00 51,700.00

Total 683,829.00 226,700.00

Band of Remuneration (RM) Executive Non-Executive Director Director Below 50,000 - 6

50,001 to 100,000 - -

100,001 to 150,000 - -

150,001 to 200,000 - -

200,001 to 250,000 - -

250,001 to 300,000 1 -

300,001 to 350,000 - -

350,001 to 400,000 - -

400,001 to 450,000 1 -

450,001 to 500,000 - -

500,001 to 550,000 - -

7.2 Remuneration of Senior Management

There is no disclosure for the remuneration of the top 5 senior management personnel mainly due to the confidentiality and sensitivity of the issue which may cause disunity among the management team and affect working morale.

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

I Audit Committee

The Audit Committee was set up on 23 March 1994 and its terms of reference established and subsequently revised to be in line with the revamped Bursa Malaysia Securities Berhad listing requirements and the Malaysian Code on Corporate Governance. It comprises of three independent non-executive directors.

Details of its key functions, roles & responsibilities, composition and other relevant information and activities are set out in the Audit Committee Report.

Category of Remuneration Executive Non-Executive Director Director

(RM) (RM)


The terms of reference of the Audit Committee are available at the Company’s website at www.advancedpack.com.my.

8.1 Chairman of Audit Committee

The Chairman of the Audit Committee and the Board are held by different individuals in compliance to good governance practice.

8.2 Former Audit Partner

The Audit Committee has a written policy that requires a former audit partner to observe a cooling-off period of at least 2 years before being appointed as Audit Committee member. The Company has never appointed any former audit partner to the Board.

8.3 Assessment of Auditors

The Audit Committee has a formal written policy and has deliberated and assessed on the issues of suitability, objectivity, competency and independence of external auditors during its meeting.

8.4 Independence of Audit Committee

All the three members of the Audit Committee are Independent Non-Executive Directors.

8.5 Diversity of Skill and Experience

The Audit Committee Members have different qualification, expertise and experience. One is a qualified lawyer, another one is a qualified professional accountant/auditor and the third one is an ex-senior government officer and turned corporate director. They also have working knowledge on the business operations of the Company.

As such, they possess the wide range of necessary skills and experience to discharge their duties and responsibilities as Audit Committee Members. As a qualified professional accountant, Mr Mah Siew Seng possesses accounting and financial knowledge to provide satisfactory input on financial matters during meetings.

II Risk Management and Internal Control Framework

Risk management is considered by the Board as an integral part of the business operations of the Company and it was embedded in the various systems of control. The Board is committed to uphold/support and enhance on continuous basis a strong control structure and environment for the proper conduct of the business to ensure risk is within tolerance level. The management which is led by the Managing Director has been tasked with the responsibility to identify, evaluate and prioritise significant risks faced by the Company for the Board’s consideration, formulate action plans, implement appropriate internal control system and ensure compliance with the applicable laws, regulations, standards and guidelines and implementing policies adopted by the Board.

The Company has appointed an independent consulting firm to conduct a review to update the risk profile of the Company and to assess whether there are any significant changes to the key risks identified previously and proposed an appropriate internal audit scope of review to assess the effectiveness of controls in managing risks. The consulting firm was again engaged in 2019 to carry out another round of review. The Board had considered and accepted the review and the updated risk profile of the Company. The management has since followed up with the updates and reviews.




9.1 Effective Risk Management and Internal Control Framework

The Directors recognise the importance of maintaining a sound system of internal control including financial, operational and compliance controls and risk management to safeguard shareholders’ investment and the Company’s assets.

The internal control system is to identify and manage any risks that the Company may encounter in the pursuit of its business objectives. The Company is aware of the importance of ongoing monitoring processes and control activities to identify and rectify operational deficiencies and to detect and prevent actual or suspected fraud, and other irregularities and improprieties.

9.2 Features of Risk Management Framework

The features of the risk Management and internal control framework are disclosed in the Statement on Risk Management and Internal Control as set out in this Annual Report.

9.3 Risk Management Committee

The Board has yet to establish a Risk Management Committee. In the meantime the Board assumes direct responsibility over risk management matters.

10.1 Internal Audit Function

The Company’s internal audit function was outsourced to Wensen Consulting Asia (M) Sdn Bhd during the year at a cost of RM 15,000.00 to review certain functional areas to ensure best practices are adopted in internal control by the Company.

The internal audit function adopts a risk-based approach and prepares its audit strategy and plan based on the risk profiles of the business operations. This approach assists the Board /Audit Committee in obtaining assurance of a regular review and appraisal of the adequacy, integrity and effectiveness of the system of internal control. In view of the limitations inherent in any internal control system, it can only provide reasonable but not absolute assurance against material misstatement, fraud, loss or breaches of laws.

10.2 Details on Internal Audit Personnel

The Company outsourced its internal audit function to an independent firm, Wensen Consulting Asia (M) Sdn Bhd which is in the related professional practice whose staff are professionally qualified. The internal auditors are free from any relationships or conflict of interest which could impair their professional judgement.

The internal auditors adopt a risk-based approach and framework and prepare the audit strategy and plan based on the risk profiles of the business operations.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

I. Communication with Stakeholders

Communication and engagement with stakeholders are increasingly more important in building trust and understanding between the Company and its stakeholders.

11.1 Effective Communication

The timely release of announcement, quarterly and annual financial results, annual reports, circulars and notices of meetings provides shareholders with regular and updated information of the Company. This is an effective communication channel between the Board, shareholders and the general public through timely dissemination of all material information.


Shareholders and members of the public can obtain online information in respect of the full Annual Report, financial statements and announcements from both the websites of Bursa Malaysia Securities Berhad and the Company.

The Company’s website at www.advancedpack.com.my also provides more information to the public for better understanding of the Company and its business. The Company endeavours to provide appropriate information upon requests by institutional investors, fund managers and analysts and the press.

At the Annual General Meeting (AGM), the Directors present the progress and performance of the Company and shareholders are encouraged and given the opportunity to participate in asking relevant questions pertaining to the Company and its business.

AGM is also the platform that will enable shareholders to gain better insights of the Company’s business and operations as well as its future prospect.

11. 2 Integrated Reporting

The Company has no intention to adopt integrated reporting currently. It may consider in doing so in the future.

II. Conduct of General Meeting

General Meeting serves as a platform for important engagement with shareholders by the Board and senior management to provide insights of the business operations besides fulfilling governance requirements.

12. 1 Notice for Annual General Meeting

A 28-day notice to shareholders for Annual Genera

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